- What it is: IVA is Spanish VAT, charged on most goods and services.
- Rates: 21% general, 10% reduced, 4% super-reduced.
- New homes: 10% IVA plus 0.75% to 1.5% stamp duty (AJD).
- Plots, commercial premises and offices: 21% IVA when sold by a business.
- Resale homes: no IVA; you pay transfer tax (ITP) instead.
- Exceptions: IGIC in the Canary Islands, IPSI in Ceuta and Melilla.
Source: Ley 37/1992 del IVA, art. 91; Agencia Tributaria tipos impositivos; Canary Islands IGIC (checked Sept 2026)
Show as table
| Item | Value |
|---|---|
| Commercial premises | 21% |
| Building plot | 21% |
| New home | 10% |
| Protected housing (VPO, special regime) | 4% |
| New home, Canary Islands (IGIC) | 7% |
What is IVA in Spain?
IVA in Spain stands for Impuesto sobre el Valor Añadido, the Spanish version of VAT. Businesses add it to their prices, collect it and pay it to the Agencia Tributaria. For a consumer, Spanish IVA is simply part of the price. On a restaurant bill or a builder's invoice you will see it shown as a separate line.
For property buyers, IVA tax in Spain matters mostly in one situation: buying from a developer or a business. That is when IVA replaces the transfer tax that applies to private resales.
Spain VAT tax rates
| Rate | What it covers (main examples) |
|---|---|
| 21% (general) | Most goods and services: electronics, clothes, professional fees (lawyers, estate agents, gestores), commercial property, building plots, most renovation work for businesses |
| 10% (reduced) | New homes (with up to two parking spaces and storage rooms sold together), hotels, restaurants, passenger transport, many foods, water, some renovation work on homes |
| 4% (super-reduced) | Bread, milk, eggs, fruit and vegetables, medicines, books and newspapers, protected housing of special regime or public promotion (VPO) |
The VAT tax Spain charges on services you are likely to use when buying matters too. Lawyer, notary and estate agent fees carry 21% IVA, so budget for it on top of the quoted fee. See the cost of buying property in Spain for a full list.
IVA on property
New builds: 10% IVA plus AJD
The first sale of a home by the developer carries 10% IVA. The same rate covers up to two parking spaces and storage rooms bought in the same sale. You also pay stamp duty (AJD) on the deed, set by the region: in 2025 it was 0.75% in Madrid, 1.2% in Andalucía and 1.5% in most other regions. Off-plan buyers pay IVA on each stage payment, not just at completion.
Protected housing: 4%
Officially protected homes (vivienda de protección oficial, VPO) of the special regime or public promotion pay 4%. These homes have price caps and eligibility rules, and they are rarely open to non-residents buying a second home.
Plots and commercial property: 21%
Building land (suelo urbanizable or solar) and commercial premises, offices and industrial units sold by a business pay 21% IVA. Rustic land that isn't for building is usually exempt and pays ITP instead. In some business-to-business sales the buyer can choose to pay IVA rather than ITP (a "renuncia a la exención"), which can suit a company that can reclaim IVA. See buying land in Spain.
Resales: ITP, not IVA
Once a home has been lived in, a later sale is a "second transfer". Second transfers are exempt from IVA and pay regional transfer tax (ITP) instead, from 6% in Madrid to 13% at the top of the Catalan and Balearic scales. This includes a developer's unsold stock that has been rented out for years. See property taxes in Spain.
Renting and renovation
Long-term residential rent is exempt from IVA. Holiday lets with hotel-style services (cleaning during the stay, reception, breakfast) can be subject to 10% IVA. Building work on a home you live in can qualify for 10% IVA if conditions are met, such as the home being at least two years old and the client supplying under 40% of the materials.
IVA tax Spain checklist for new-build buyers
- Check the invoice: the developer should issue an invoice showing the price, the IVA rate and the IVA amount for each payment, including the reservation deposit.
- Confirm it is a first delivery: ask whether the home was ever let or used, and for how long.
- Parking and storage: up to two parking spaces and storage rooms at 10% only if bought with the home in the same sale; bought separately they pay 21%.
- Stage payments: IVA is due on each payment as you make it, so a 30% deposit carries its own IVA.
- Bank guarantee: off-plan payments should be protected by a bank guarantee or insurance policy covering the amounts paid.
- Price in the contract: check whether the price is quoted "IVA incluido" or "más IVA". The difference on a €300,000 home is €30,000.
Canary Islands, Ceuta and Melilla
- Canary Islands: no IVA. The islands have IGIC (Impuesto General Indirecto Canario), with a 7% general rate. A new home bought from a developer normally pays 7% IGIC. A main home up to €150,000 pays 5% (3% for buyers aged 35 or under and some other groups), and protected housing (VPO) sold by its promoter pays 0%. See buying property in Tenerife.
- Ceuta and Melilla: no IVA or IGIC. They charge IPSI, a local tax with much lower rates.
IVA refunds for tourists
If you live outside the EU, including in the UK or US since Brexit, you can reclaim IVA on goods bought in Spain and taken home in your luggage within three months. Ask the shop for a tax-free form, validate it electronically (the DIVA system) at the airport or border before you check in bags, then claim the refund through the shop or a refund company. There is no minimum spend, but refund companies take a fee. Services such as hotels and meals can't be refunded.
Checking the property as well as the tax
With a new build, it's worth checking that the developer's plot is properly registered and free of charges before you pay stage payments. You can start with the nota simple. If you'd like a second look at a property, enter the address or referencia catastral on our free property check and we'll get back to you by email.